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Technical Analysis | Reliance Communications – Traders not impressed

Recent buzz in the telecom industry is the merger of Aircel and Reliance communications (which sounds more like indirect acquisition of Aircel by the giant Reliance). Telecom sector stocks came under strong pressure following the announcement of Reliance Jio (Owned by Mukesh Ambani) and Industry is gearing up for some massive phenomena that waits in the future. Both Domestic and Foreign investors became concerned while some notable share holders are liquidating their positions on telecom stocks. But recent events are not impressing market participants or Price Action.

Reliance Communications | Price Action Trading in Intermediate Range

Reliance Communications trading in a range bound structure since February

Technically, Reliance communications signed a definitive agreement with Aircel to merge wireless business to create India’s third largest telecom operators by number of users. Surprising enough Price Action didn’t respond in an optimistic way instead market became more cautious. There are few reasons to explain the behavior. First of all Reliance Jio and its consumer plans are shakers for Telecom industry. Only a few large sharks will survive this pricing model. Secondly – Reliance communication is trading in an intermediate range since February. Price Action is trading in a range between 60.00 – 48.00.

Tough Year for Reliance Communication Share Prices

Reliance Communications Share prices experiencing a bad year

In the start of 2016, Reliance communication share prices fell from 91.00 to 48.00 per share value. Later market went into consolidation from the end of February. Public interest on the stock dropped as a result of this laggard performance. Selling pressure is dominating the price action and fundamental factors are diverged from price action. We can spot the signs of sellers squeezing the buyers as Price action making lower ranges. Trading within the range is a justifiable option for now. Traders should look for signs of Accumulation or Failed Accumulation within the range, also notice if there are any developments of trending structure.


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About the Author:

Balaji is a Speculator, Investor and Trader (All in All!!!) and self published author. Trading in the Markets since decade, have seen more ups and downs along with institutional trader's lifestyle. He usually trades Nifty, Bank Nifty, Commodities, Futures cum Options around both Indian and global Markets. Balaji applies highly analytical and systematic Price Action strategies He blogs passionately about Trading strategies, Price Action Trading, Technical analysis, Macro events, Market setups, Financial and Economical topics. Apart from Trading and Blogging, Balaji also mentors aspiring Traders and Investors on becoming successful in highly competitive financial Markets.

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